NairaBrain ~ News » Financial News

Naira appreciates further at interbank.

soloheater — Wed, 04 Aug 2010 13:21:10 +0000

The naira further by18 kobo at the interbank foreign exchange market on MondayReflecting the persistent impact of the dollar inflow into the market last week from oil firms, the interbank exchange rate dropped to N150.0125 per dollar at the close of business from N150.1925 the previous week.

Last week, the naira appreciated in all the segments of the foreign exchange market following $348m supply from oil firms.

The naira gained seven kobo at the official segment where the exchange rate dropped to N148.6 from N148.67 the previous week.

At the interbank segment, the naira gained nine kobo as the interbank rate closed at N150.1925 from N150.2825.
Also reflecting the impact of the dollar inflow, demand at the Wholesale Dutch Auction System (WDAS) fell by 23.5 per cent to $393.4m from $516.7m the By Babajide Komolafe

Last week, the naira appreciated in all the segments of the foreign exchange market following $348m supply from oil firms.

The naira gained seven kobo at the official segment where the exchange rate dropped to N148.6 from N148.67 the previous week.

Source:Vanguardngr.com

World Bank Votes $180 million for Research in Africa

NairaBrain — Fri, 16 Jul 2010 03:43:07 +0000

The World Bank has earmarked $180 million for research in technology development in Africa universities.

The fund is to be administered through the Africa Technology Policy Study (ATPS) the Executive Director ATPS Network Kevin Chuka Urama disclosed in Yola, at a workshop.

Participants urged policy makers, researchers and the government to embrace the use of local scientific and technological innovations in exploiting the vast raw and mineral resources of their respective nations, for the wellbeing of their members.

The Federal University of technology Yola (FUTY), which hosted the event, is among the category of institutions set to benefit from a $7 million dollar funding grant benchmarked upon its successful award as ATPS’ centre of excellence.

The Minister of Science and Technology, Mohammed Abubakar, represented by the Director General, Raw Materials Development Council, P.A. Onwualu, urged science practitioners in the country to come up with strategies that can lead to development of a “home grown” technology based policy for the transformation of the Nigerian economy, and move it from its monolithic economy of oil as its sole source of revenue.

The ATPS network Nigerian chapter berated the failure of many African states to develop their scientific and technological capacities through funding of research and training in science and technology, explaining that “much of the efforts made so far to develop research and training in science and technology in Africa have been through Western international scientific cooperation initiatives.

The Minister of Science and Technology said that most governments in Africa have come to the realization that science and technology education is the only way the continent can be “lighted” and move “from being called the dark continent to a continent of light.”

Shake-up in NNPC, Petroleum ministry

soloheater — Tue, 27 Apr 2010 09:54:54 +0000

ABUJA– IN a move geared towards redirecting affairs of the Nigerian National Petroleum Corporation, NNPC, and the Ministry of Petroleum Resources, the Federal Government, yesterday, announced a major shakeup with the appointment and transfer of some directors.

These changes are coming barely one month after the former Group Managing Director of the NNPC, Sanusi Mohammed Barhindo, was fired by Acting President Good Luck Jonathan; and in his place, Mr Shehu Ladan, was appointed.

The changes which take immediate effect were contained in a statement signed by the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, and made available to State House Correspondents in Abuja.

The statement said: “The Ministry of Petroleum Resources/NNPC has announced the following appointments/changes in the oil and gas industry, to take immediate effect.”

It stated that the Group Executive Director, GED, Engineering and Technical Services of the NNPC, Mr. F. Abbiye Suku moves to the position of GED Corporate Services, while the Director of Directorate of Petroleum Resources, DPR, Mr. Billy Agha moves to NNPC headquarters as GED Engineering and Technical Services.

The current GED Corporate Services, Alhaji A. Yusuf, moves to the position of GED Commercial and Investment, C&I, while the current GED C&I, Alhaji Aminu Babakusa moved to the position of GED Special Services.

The statement added that all the GEDs on acting capacity over the past two years have been confirmed.

At the Ministry of Petroleum Resources, the statement said that Mrs. Allison-Madueke has approved the following changes: Mr Andrew Obaje, Deputy Director, Directorate of Petroleum Resources, DPR, becomes substantive Director DPR, while the Acting Group General Manger, Ag. GGM, in charge of New Business Development Division, NBDD, Mr. Samuel Okeke, now moves to the Pipelines and Products Marketing Company, PPMC, as substantive Managing Director. He swapped position with Mr. Reginald Stanley who moves to head NBDD.

Substantive MD for Nigerian Petroleum Development Company
Mr. K. Olaosebikan, who was the Managing Director, Nigerian Petroleum Development Company, Nigerian Petroleum Development Company, now moves to NNPC Corporate headquarters as Group General Manager, GGM, National Frontier on Exploration Services,under the GED Exploration and Production.

Olaosebikan replaced Mr. A. Membre, the Executive Director Operations of NPDC, who became the substantive managing director of Nigerian Petroleum Development Company.

The statement added that an International Trading Company, ITCO, was being created, noting that the ITCO would merge activities of HYSON, NAPOIL, and Duke Oil.

It stated that Dr. Ayo Balogun has been moved from National Petroleum Investment Management Services, NAPIMS to head the ITCO as its inaugural Managing Director.

Also appointed was Mr. M. A. Fiddi, as the GGM of NAPIMS, who replaced Dr. Ayo Balogun, while Mr. Anthony Ogbuigwe was confirmed as the substantive Managing Director of PHRC.

Source:Vanguardngr.com

Equitorial Trust Bank fires 150 staff

NairaBrain — Tue, 30 Mar 2010 18:51:17 +0000

Equatorial Bank yesterday fired 150 staff in a bid to restructure its operations for increased efficiency.
ETB is one of the eight banks rescued by the Central Bank of Nigeria (CBN) following the result of its special bank audit last year.
According to a source close to the bank, the retrenchment was in compliance with the directive of the CBN that the management of the rescued banks should reduce staff strength by 30 per cent.
The other rescued banks are Oceanic Bank, Intercontinental Bank, Finbank, Afribank, Bank PHB, Spring Bank, Union Bank.
In compliance with the directive of the apex bank, these banks have sacked about 10,000 staff between October and last month.

The 150 staff sacked by ETB is about five per cent of its almost 1,000 workforce.
One of the affected staff told Vanguard that the sack letter was distributed yesterday morning. But management of the bank is, however, silent on the gratuity of the sacked staff.
It was gathered that the sacked staff only said that the outstanding allowances are been compiled.
It would be recalled that following the sacking of the executive directors and one of the non-executive directors, shareholders of the bank pledged to rectify the lapases revealed the special bank audit of CBN including fresh capital injection.
A statement form the CBN to this effect stated “Following the special examination of all banks operating in the country, and the subsequent actions by the CBN, the shareholders of Equitorial Trust Bank Limited requested the permission of the CBN to be allowed to rectify lapses identified in the bank.
“In pursuance to that, the shareholders executed a Deed of Covenant, the specific terms and conditions of which included the following:
“i. The willingness of the shareholders to recapitalize the bank by way of injection of additional capital latest by June 30, 2010;
“ii. Restructuring, diversification and enlargement of the capital base of the bank either by way of a public offering of shares, securing a core investor or merger with a local bank within one (1) year period;
“iii. Addressing the corporate governance issues in the bank which were mainly ascribed to the previous Executive Management team in the bank;
“iv. Reconstitution of the Board of Directors of the bank through the retirement of two non-executive directors and the appointment of four new non-executive directors, including Dr. Mike Adenuga Jnr. (CON), an erstwhile member of the board, subject to the approval of the CBN; and “v.
Convening a general meeting of the bank’s shareholders to ratify, through a resolution all the nominated appointments to the bank’s board.

“Having reviewed the terms and conditions of the Deeds of Covenant, CBN has consented to the request aimed at further strengthening the bank. In granting these requests, CBN noted that the special examination had not raised issues of serious supervisory concern or criminal activity by any member of the Board of ETB.
“The CBN will closely monitor the implementation of the terms of the Covenant to ensure that the lapses are fully rectified and in the overall interest of the banking system.”

Source: vanguardngr.com

CBN suspends deadline for old N50, N10 and N5 notes

NairaBrain — Wed, 03 Mar 2010 22:49:37 +0000

LAGOS—CENTRAL Bank of Nigeria, CBN, has suspended the March 31 deadline for acceptance of old N50, N10 and N5 paper notes as legal tenders.
Last year, CBN introduced new N5, N10 and N50 polymer banknotes into circulation and gave a deadline of six months ending March 31, 2010, after which the old paper notes would cease to be accepted as legal tender. But more than a month to the expiration of the deadline, Nigerians, especially traders and transporters, began to reject the notes as legal tender.

A top CBN official who spoke to Vanguard on condition of anonymity, said the apex bank was aware of the concerns about the old notes and has decided to extend the deadline indefinitely. This means the old N50, N10 and N5 notes will continue to be accepted as legal tender until they are all withdrawn from the system.
President Umaru Yar’Adua, as part of the last Independence Anniversary on October 1, 2009, launched the new N5, N10 and N50 polymer notes as legal tender in the country.
Speaking at the launch, the Governor of the Central CBN, Mallam Sanusi Lamido Sanusi, urged Nigerians to embrace the new currencies as well as strive to keep the naira clean. He also urged Nigerians to check the abuse to which the currency has been subjected to over the years.

Sanusi who said the campaign to keep the naira clean will further be enhanced by the introduction of the new polymers notes, said that banks “have established exchange windows to enable the public exchange the new polymer notes with their genuine old ‘paper’ bank notes, which cease to be a legal tender from March 2010.”
Highlighting advantages of the polymer notes on the paper notes, Sansui stressed that the polymer notes were made of water-proof materials resistant to easy tear and dirt.

The CBN had in 1973 introduced notes for 50 kobo, N1, N5, N10 and N20. The 50 kobo was issued last in 1989. In 1991, the N50 notes were issued, followed by N100 in 1999, N200 in 2000, N500 in 2001 and N1000 on October 12, 2005.
On February 28, 2007, new versions of the N5 to N50 banknotes were introduced. Originally, the N10, N20 and N50 were planned to be in polymer banknotes, but only the N20 was made of polymer until October 1, 2009.

Source: Vanguardngr.com

Intercontinental Bank : Court orders detention of 6 managers

NairaBrain — Tue, 05 Jan 2010 09:05:15 +0000

LAGOS—A Federal High Court sitting in Lagos, yesterday ordered the remand of six top officials of Intercontinental Bank in the custody of the Economic and Financial Crimes Commission, EFCC, over their alleged involvement in money laundering scam totaling about N27 billion. Trial judge in the matter is Justice Tijani Abubakar.
The accused persons are, Financial Controller of the bank, Akinwumi Solomon Fabunmi; Head of Domestic Operations, Toyin Odesile; Head of Foreign Exchange, Ayoola Ayinde; Head of Corporate Treasury, Oluwatoyin Oyelade; a director of Intercontinental Bank and General Manager of Tropics Securities Limited, Bayo Dada and the General Manager of Intercontinental Capital Market Limited, Ayodele Thomas will be in custody till 6 January, when their bail applications would be determined.

The accused persons, are believed to be associates of the former Managing Director of the bank, Erastus Akingbola, who is still at large, even though a 12-count charge had been filed against him by the EFCC.
However, when the matter came up in court, EFCC’s lawyer prayed the court for the name of one of the accused person, Raymond Obieri, who is also the Chairman of the board of directors of the bank should be struck out from the charge on health ground, a request the court granted.

When the charge was read to them, they pleaded not guilty to all the count charge.
Akingbola and five companies in which the Intercontinental Bank Directors allegedly have interest were also named in the charge. The companies are Regal Investment Limited, Tropics Securities Ltd, Tropics Properties Ltd, Tropics Finance and Investment Ltd and Bankinson Nigeria Ltd.
The accused persons, according to the charge, were alleged to have perpetuated criminal conspiracy, fraudulent withdrawal, conversion and illegal transfer of Intercontinental Bank’s funds estimated at about N27 billion between March and June, 2009.

Fabunmi, Ayoola, Bada, Odusile and Akingbola (at large), according to the charge, were said to have on 11 May, “fraudulently withdrawn N10 billion depositor’s fund from the Time Deposit General Ledger account no 211000002” of the bank in the guise of buying shares for it, but allegedly used same to defray liabilities of Tropics Securities, Tropics Properties and Bankinson.

According to count four of the charge, the accused persons fraudulently withdrew, between 27 May and 30 June , the sum of N8.684billion from the bank “under the guise of payment for shares purchased for the bank and fraudulently converted” the said sum to the account of the said companies.

Banks, Insurance Firms Withhold N39.21bn Pension Assets

NairaBrain — Sun, 27 Dec 2009 19:42:34 +0000

Banks and insurance companies withheld pension assets worth N39.21 billion in 2008, says National Pension Commission.
The Commission in its report for 2008 released last week said that this amount comprise legacy pension assets that should have been transferred to licensed pension operators.
The report stated, “The 24 deposit money banks were inspected to determine their level of compliance with the PRA (Pension Reform Act) and PenCom’s guidelines.
As at the date of the examination, 43,549 out of the industry’s 62,095 employees had opened the RSAs (Retirement Savings Account).

The sum of N22.82 billion had also been remitted to the RSAs while the sum of N1.9 billion was outstanding.
The examination also reveals that legacy pension assets worth N84.05 billion were yet to be transferred to licensed pension operators. PenCom had taken steps to ensure that banks complied with the PRA 2004.
As at December 2008, out of the 18,546 employees that were yet to open RSAs, 8,350 had opened and the sum of 3.77 billion remitted to their PFAs (Pension Fund Administrators).
Thus, only 10,195 out of the 62,095 employees in the banking sector were yet to open RSAs. Also out of the N84.05 billion worth legacy pension assets, N63.34 billion were transferred to the licensed pension operators by the end of 2008.
The on-site inspection of 40 insurance companies revealed that out of 5,854 employees, 4,442 employees had opened RSAs while 1,390 were yet to open. The sum of N1.33 billion was remitted to their RSAs while N211.59 million hade not been remitted.

The insurance companies had in-house legacy pension assets worth N689.09 million that were yet to be transferred to the licensed pension operators.
This is in addition to third -party pension assets worth N9.12 billion that were under their management as well as N8.69 billion belonging to public sector organisations under the Unified Pension Scheme. However effort was maintained to ensure the transfer of these pension assets to licensed pension operators.
On-site inspection was also conducted on ten federal government self-funding agencies. The inspection revealed that out of the agencies’ 14,118 employees, 12,525 had opened RSAs.

The sum of N4.04 billion had also been remitted to the employees’ RSAs while N2.23 billion was outstanding. Similarly, legacy assets worth N22.31 billion were yet to be transferred to licensed pension operators. The respective agencies were engaged to ensure the transfer of the assets before 2nd quarter of 2009.”

Central Bank of Nigeria, CBN Bans Cheque Payment Above N10 Million

NairaBrain — Sun, 13 Dec 2009 19:10:19 +0000

The Central Bank of Nigeria has banned cheque payment for any amount above N10 million, even as it explained the huge losses posted by banks in their nine months operating results.

In a circular to deposit money banks entitled ‘Maximum Limit on Cheque Payment’ and signed by the Acting Director, Banking Supervision the CBN stated, ” As a further step at enhancing the efficiency of the payment system in the country, the Central Bank of Nigeria hereby sets a maximum limit on cheque payment at N10 million with effect from January 1st 2010.
“To this end, any payment value exceeding N10 million should be made through the e_payment mode such as the Central Bank Interbank Funds Transfer System (CIFTS i.e RTGS) and Nigeria Interbank Settlement System Electronic Funds Transfer (NEFT) from that date.
“The maximum limit serves as a risk reduction measure in the clearing and settlement arrangement in line with international best practice. To support this initiative, deposit money banks are implored to properly educate their customers on the implementation procedure.”
On the huge losses posted by banks, the CBN in a press statement said, “All Nigerian banks have now reported their results according to these stringent standards for corporate governance, transparency and disclosure. As expected, the third quarter earnings announcements for a number of banks have included a level of provisions that have led to reported losses, reflecting the true position of the lending portfolios,.

This has been particularly evident in the nine banks assessed to be in a ‘grave situation’ following the outcome of the combined CBN /NDIC examination. There are two key reasons for the current reported losses:
“Following more detailed investigations, the new management of these banks found the situation in a number of the Affected Banks to be worse than had been originally thought.”
A number of issues only came to light after the CBN had put in place new management teams who therefore had access to greater and more up to date information. As a result of these findings, the banks had to make provisions over and above the CBN’s initial recommendations. Nigerian banks, like other banks in countries around the world have faced a very challenging operating environment this year.
“However, the CBN is confident that the worst is now behind us. The current management teams of the Affected Banks have made significant progress towards restoring stability in their operations and continue to work diligently to ensure that sustainable, long term solutions are implemented with a view to building a solid platform for future growth.
SOURCE: vanguardngr.com

EFCC Arrests Four Intercontinental Bank Official Over Fraud

NairaBrain — Thu, 03 Dec 2009 09:07:20 +0000

The Economic and Financial Crimes Commission on Monday arrested four top officials of Intercontinental Bank Plc for allegedly transfering N12bn belonging to depositors to the accounts of the former Managing Director of the bank, Mr. Erastus Akingbola.

The arrested workers include the bank’s Financial Controller, Mr. Akin Fabunmi; Head, International Operations, Dr. Ayoola A.; Head, Domestic Operations, Mr. Toyin Odesile; and Treasurer, Toyin Oyela.

It was learnt that the arrest of the bankers was facilitated by the new management of the bank after it noticed that the sum was moved out of the coffers of the bank without notice or approval from the appropriate authorities.

According to a reliable source within the EFCC, the suspects allegedly transferred N2bn out of the general legal account of the bank last month to Akingbola; and moved another N10bn to the former managing director’s company account in another bank.

The source said, “Last month, the suspects moved N2bn out of the general legal account of the bank to a subsidiary of the bank. Then, they transferred the money to a bureau de change, converted it to pounds sterling and paid it into the domiciliary account of Akingbola, and it was pushed to his United Kingdom account.

“The arrested officials also moved N10bn into Akngbola’s company’s account in another bank. The former MD’s company owed the bank N10bn, so, it was used to settle loans obtained by Akingbola and members of his family. It is important to note that these funds belong to depositors.”

The Head, Media and Publicity, EFCC, Mr. Femi Babafemi, confirmed the arrests.

It will be recalled that Akingbola was alleged to have stashed £10m away in foreign accounts by distributing it in his accounts domiciled in the UK and the United States of America.

On August 23, 2009, the EFCC officially declared Akingbola and Mrs. Cecilia Ibru of Oceanic Bank Plc wanted for alleged culpability in granting illegal bank loans. Ibru has since reported to the anti-graft commission.

Declaring the duo wanted then, the EFCC in a statement signed by Babafemi, said that ”the two former bank executives are wanted in connection with fraudulent abuse of credit process, insider trading, capital market manipulation and money laundering, running into billions of naira.”

Babafemi had stated then that the Chairman of EFCC, Mrs. Farida Waziri, directed that the two former bank executives be declared wanted following their failure to honour the commission‘s invitation.

He had said, ”Apart from failing to honour the commission‘s invitation, intensive search for the two executives in the last one week has not been successful. They obviously went into hiding to evade arrest.

“This development has made it imperative for the commission to solicit for useful information from Nigerians who know their whereabouts.

”In the same vein, it is necessary to warn that anybody who harbours the two former bank executives will be treated as an accomplice or accessory to crime.”

More than three months after declaring Akingbola wanted and despite a promise that he would appear in Nigeria to answer to allegations against him, the former Intercontinental Bank boss is yet to show up.

Source: Punchng.com

Fresh N180bn Loans Uncovered in Intercontinental Bank

NairaBrain — Thu, 03 Dec 2009 08:33:53 +0000

Fresh allegations have emerged in Abuja that a former Managing Director of Intercontinental Bank, Dr. Erastus Akingbola, granted N180bn loans to his associates and companies he had interest in.

The total debt stock of the bank, as announced by the Central Bank of Nigeria in August, was N210.9bn.

Akingbola was one of the five bank managing directors sacked by the CBN Governor, Mr. Lamido Sanusi, on August 15.

He is currently said to be living in the United Kingdom, from where he is challenging his removal in court.

But an EFCC operative told our correspondent on Tuesday that Akingbola gave a part of the N180bn loans to some ex-directors of the bank.

According to the source, the beneficiaries largely used the loans to buy Intercontinental Bank shares.

The former bank chief was also said to have transferred £8.5m to London in March 2009 and another £1.3m in July.

Our source said, “The N180bn is a new discovery. It is not impossible for our team of investigators to make fresh discoveries. Akingbola is not the only one; we have made a breakthrough, which will soon be in the public domain.”

The source said Tropics Properties and Bankinson Nigeria Limited are some of the companies Akingbola had interest in through which the loans were taken.

According to him, Tropics Properties received a loan of N4.4bn in May 2009 and later N4.3bn, while Bankinson got N1.2bn.

He added that five directors were said to have received N8bn loans each to purchase the bank’s shares.

It was also alleged that in 2008, some of the directors obtained N10.6bn loan each.

When contacted on the telephone for comments on the N180bn loan approval by Akingbola, the EFCC Head of Media and Publicity, Mr. Femi Babafemi, said, “Your figure may be correct, but I know that investigation into this is still going on. I will not say more than that.”

The discovery of the N180bn loans came just as the EFCC said it had discovered that the N747bn non-performing loans of Union Bank of Nigeria Plc., FinBank Plc., Afribank Plc., Intercontinental Bank and Oceanic International Bank Plc, were bloated.

It was learnt through another source at the anti-graft agency that the commission had recovered 60 per cent of what it considered as the total debts owed the banks.

Total debt recovery by the EFCC stood at N171bn as at November 3.

On Monday, Intercontinental Bank declared that it had recovered N78bn in three months. It also said its target was N100bn before the end of the year.

In concluding that the N747bn debt was bloated, our correspondent gathered that EFCC cited a fraud that involved one of the former managing directors of the three banks that failed the second round of the CBN stress test.

The source said, “We have discovered that some of these ex-managing directors cooked up their books to cover up monies they took from the banks.

“And when the CBN went for inspection, it was these misleading records that they forwarded to them. So, the figure may not be as high as we thought in the case of the N747bn.”

He explained that the said former bank chief executives habitually rejected loan applications, but turned round to use the documents to secure facilities in favour of their numerous companies.

The source noted that the fraud was usually perpetrated by debiting the amount taken from the bank against the applicant that was originally denied loan.

According to him, a woman’s protest against N5bn loan debit in one of the three banks that failed the second round of the CBN special audit when the EFCC swooped on debtors led to the discovery of the scam.

This pattern of fraud, he added, was a major trend in financial abuses linked to one of the former managing directors.

Source: Punchng.com

Dubai Credit Crisis: U.A.E. Will Support Banks

NairaBrain — Sun, 29 Nov 2009 19:16:26 +0000

MUMBAI — The United Arab Emirates central bank on Sunday said that it stood behind domestic and foreign banks operating in Dubai after last week’s announcement that Dubai World needed more time to pay back some of its $60 billion in debt.

Dubai surprised the financial world on Wednesday when it said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, to agree to a six-month standstill on the debt. Global markets sank on the news.

On Sunday, the central bank said it set up a “liquidity facility” for the Dubai banks, and tried to reassure investors that the banking system there was more sound and liquid than a year ago.

Whether these moves will restore investor confidence remains to be seen as soon as Monday, when most U.S. traders return from a long holiday weekend.

In recent days, investors have begun worrying that Dubai’s debt troubles might be the first in a series of panics in developing countries that borrowed too much money in the past few years — much as in 1997, when Bangkok became the first capital to crumple in the Asian financial crisis.

Many analysts said their biggest worries were not about whether Dubai would fully repay its lenders, or how much assistance it would receive from its neighbor Abu Dhabi. Rather, these people said, their main concern was what Dubai’s problems said about the rest of the world.

These analysts fear that while Dubai may have spent its borrowed money more extravagantly than most, it is far from alone in having taken on too much debt for dubious real estate projects. Investors have already raised alarms about debts in Ireland, Greece and East European countries.

During the shortened U.S. trading day Friday, the first since the Wednesday announcement by Dubai that it was seeking more time to repay billions in loans, investors sold bonds of other emerging markets and drove up the price of insuring against a default by those same countries.

If investors’ fears about a crisis in emerging markets were realized, it would be a severe setback to a fragile global economy that has yet to fully recover from the credit crisis last year.

“Dubai could be the beginning of a series of sovereign debt issues or crises,” said Mohamed El-Erian, chief executive of Pimco, the giant bond-trading company. “What Dubai is going to do is make people think more intensely about the lagging implications of last year’s crisis. It’s going to be a wake-up call to the people who thought that the financial crisis was just a flesh wound.”

Mr. El-Erian and other investors said that the full effects of the financial crisis had been masked in recent months by government spending and bailouts. But those interventions have not solved problems in commercial real estate, as demonstrated by Dubai’s challenges. “The consequences of the financial crisis are going to play out for a while,” he said.

Investors will probably begin to focus on the troubles of individual countries, banks and companies. Analysts say they expect the scrutiny to fall hardest on countries that have already been flagged for their financial weaknesses. That group includes Ireland, Greece, the Baltic states, Ukraine, Pakistan, Romania and Bulgaria.

There will be also be “recognition that for the first time in decades, there are sovereign risks among developed Western countries,” said Nouriel Roubini, the New York University economist who predicted last year’s financial crisis, referring to Ireland and Greece.

Simon Johnson, a former chief economist at the International Monetary Fund, said that the cost of insuring against defaults by big Irish banks had risen quickly since the Dubai announcement.

What that means for those countries is that they will not be able to raise money easily or inexpensively. It could also put pressure on stronger members of the European Union to bail out weaker members, or at least help them restructure their debts and nurse them back to health.

“I think the main issue here is that governments that are in trouble are going to see people getting tough with them,” Mr. Johnson said.

Yet, Dubai’s problems could also be a boon for some emerging economies, like India, Brazil and China, that are not heavily indebted to overseas investors and which have large populations that are buying more goods and services. Investors have been pouring billions of dollars into those countries in recent months and are likely to increase their allotment to them as they shift away from financially troubled countries.

While that might appear to be a boon for the favored group, Eswar S. Prasad, an economist at Cornell University in New York State, said that those countries might not be well prepared to handle the extra cash. Stock and real estate markets already appear overheated in India and China, for instance.

“Overall, the Dubai debacle is not good for emerging markets in the short run not because it will lead to capital inflows drying up,” Mr. Prasad said. “But rather because it will push more capital towards emerging markets that are already having a tough time managing huge inflows and away from those that need more external financing.”

Some analysts said the comparison to Bangkok in 1997 might be overblown. These people say that Dubai’s borrowing and growth was very different from what other emerging markets were doing in the past few years. Thailand in the 1990s, by contrast, followed an economic development model that closely resembled the approach taken by other Asian countries like Indonesia, Malaysia and the Philippines.

For instance, Dubai in recent years was importing dollars and people to build, live and work in its new gleaming glass-and-steel towers, as it sought to remake itself into a regional financial and economic hub from a sleepy trading outpost.

Yes, there was froth in other emerging markets, these analysts said, but many of them, like India, followed a different approach and pursued more pedestrian ambitions than did Dubai.

These countries borrowed to build factories, infrastructure and service businesses to employ their existing and growing populations.

“Dubai was particularly flaky in the sense that it seemed to be trying to make something out of nothing,” said Ila Patniak, a senior fellow at the National Institute of Public Finance and Policy in New Delhi. “When I think of India, I don’t think it’s going to hit us so much. We are really not doing the things that they were doing.”

Source: NyTimes.com

Budget Nigeria: FG expects N6.04trn revenue in 2010

NairaBrain — Thu, 26 Nov 2009 12:50:25 +0000

Budget: FG expects N6.04trn revenue in 2010

ABUJA — DETAILS and revenue estimates for the 2010 budget inadvertently omitted in the budget proposal submitted to the National Assembly on Tuesday were yesterday circulated to Senators.
The revenue estimates showing a total collection of N6.040 trillion accruable from oil and non-oil sources showed oil revenue yielding N4.293 trillion of the amount with non-oil revenue expected to yield N2.899 trillion.

However, Senators have predicted doom for the budget based on the woeful performance of previous budgets, while members of the House of Representatives lamented the low implentation of the 2009 budget.
The details obtained by NairaBrain yesterday indicated that the N370 billion has been earmarked for the Independent National Electoral Commission, INEC, for the monitoring of the conventions and congresses of the political parties ahead of the 2011 general elections.
Of the N4.293 trillion expected from oil sources, N749.99 billion is the government’s share of the cost of production, another N208.29 billion is earmarked for National Domestic Gas Development and another N2.66 billion is set aside for crude oil pre-export expenses leaving a balance of N3.332 billion as net oil revenue.
13 per cent of the outstanding balance amounting to N433.19 billion is set aside as derivation proceeds for oil producing states leaving a balance of N2.899 trillion as revenue to be shared by the Federal Accounts Allocation Committee, FAAC.
The estimates also show that the total receipts expected in the Federation account in 2010 would be N3.775 trillion with the Federal Government share of the FAAC being N1.83 trillion with the States getting N1.008 trillion while the 774 local governments in the country are to share N777.74 billion from the federation account.
The revenue estimates, according to the Minister of Finance, Mansur Muhtar, were inadvertently omitted from the budget proposal submitted to the National Assembly on Tuesday.
INEC under the budget estimates expects to spend N21.441 billion to prepare for the 2011 round of elections; N150 million to upgrade its web site and another N100 million to renovate the national headquarters of the commission.
INEC is also expecting spend N25 million in preparing a new electoral bill and N2.2 billion for the rehabilitation of six local government area offices in each of the thirty six states of the country and Abuja.
INEC also expects to spend N15.198 million in an electronic collation system and N160 million in the production of a national voters’ register.

Cecilia Ibru Sanusi of Plotting to Sell Oceanic Bank to friends

NairaBrain — Wed, 25 Nov 2009 07:47:16 +0000

SACKED Managing Director of Oceanic Bank Plc, Mrs. Cecilia Ibru, has filed a suit before a Federal High Court sitting in Lagos, challenging her removal as the Chief Executive of the bank by the Central Bank, CBN, accusing the Governor, Mallam Sanusi Lamido of plotting to sell Oceanic bank to his friends under the guise of core investors.
Mrs. Ibru, who was on August 14, 2009, removed as MD of Oceanic bank alongside four other bank Chief Executives by the apex bank for allegedly acting in a manner detrimental to the depositor’s funds and abuse of office, is contending in the fresh suit that the CBN Governor, Mallam Sanusi acted hastily and in bad faith in removing her as Chief Executive of the bank.

She is further claiming that she was never given any opportunity to defend herself before she was sacked. The matter is before Justice Mohammed Liman.
Mrs. Ibru, in an affidavit she deposed to in support of the suit, averred that her sack as Oceanic Bank Managing Director (MD) on August 14, is part of an elaborate design by Mallam Sanusi, to sell Oceanic Bank to his friends under the guise of “core investors.”
She further averred that “the appointment of John Aboh to replace her was part of Sanusi’s design to sell the bank to his nominees”.
She said Sanusi acted hastily and in bad faith in getting rid of her.
“Neither Sanusi nor officials of the CBN gave any report of special examination to me in my capacity as the Chief Executive Officer of the bank or in my private capacity for the purpose of enabling me defend myself and the bank prior to my removal from office,” she averred.
She therefore, wants the court to determine, among others, “in the light of Section 36(1) of the Constitution and Section 35(d) of the Banks and other Financial Institutions Act (BOFIA), whether Sanusi and the CBN were bound or not bound to observe the rules of natural justice and fair hearing by hearing her side of the story before sacking her”.
She is further seeking an order of the court, setting aside her removal and an order restraining Aboh from occupying or parading himself as the Chief Executive Officer of Oceanic bank.
She also wants the court to stop Sanusi and the CBN, their servants, agents or privies from acting in pursuance of their directives and from interfering with her functioning or preventing her from functioning as the Managing Director of the bank.

The apex bank in its preliminary objection to the suit, is contending that Mrs. Ibru lacked the locus standi to institute the action and that the court lacks jurisdiction to entertain same.
According to the CBN, the suit is not justiciable, as it didn’t disclose a reasonable cause of action and the suit constitutes a gross abuse of court process and that it ought to be dismissed.
No date has been fixed for hearing of the suit.

Multi-Million Naira Nigeria Deposit Insurance Corporation Fraud: Ogunleye, 5 others have case to answer –Court

NairaBrain — Wed, 25 Nov 2009 07:34:48 +0000

Multi-million naira NDIC fraud: Ogunleye, 5 others have case to answer –Court

An Abuja High Court on Tuesday ruled that the Managing Director of the Nigeria Deposit Insurance Corporation, Mr. Ganiyu Ogunleye, and five other key officials of the agency accused of conspiracy and criminal breach of trust in an alleged multi-million naira fraud have a case to answer.

Ruling on two separate preliminary objections filed by Ogunleye and three of his co-accused, challenging their arraignment by the police before the High Court of the Federal Capital Territory, as well as the charges preferred against them, the presiding Judge, Honourable Justice Ugochukwu Ogakwu, held that from the proof of evidence attached to the charge, it is indisputably clear that the accused persons have a prima facie case of conspiracy and criminal breach of trust to answer as contained in counts one and four of the charge sheet.

In the same vein, counts two and three were quashed by the court for failure of the prosecution to seek and obtain sanction from the immediate past minister of finance, Dr. Shamsuddeen Usman, before preferring the charges against the accused persons as required by Section 140 sub-section one of the Penal Code.

However, the court held that the offences of conspiracy, stealing and fraudulent conversion of funds contained in counts 5, 6 and 7, were allegedly committed in Lagos, a place outside the jurisdiction of the FCT High Court, and as such, the court could not adjudicate over them. Consequently, counts 5, 6 and 7 were accordingly struck out to enable the prosecution file the appropriate charge in respect of the offences in counts 5, 6 and 7 in Lagos if it so wishes.
The case was eventually adjourned to January 28, 2010.

for the accused persons including the NDIC managing director, Ganiyu Ogunleye, the Executive Director Operations, Professor Peter Umoh, as well as Dr. Joe Emerson and Innocent Ilozumba, both CBN Interim Committee Members for the defunct Fortune Bank, and two others to be arraigned in court for their plea to be taken in commencement of trial.

The ruling followed preliminary objections file by Ogunleye, Umoh, Emerson and Ilozumba, challenging their arraignment by the police on charges bordering on fraud, and well as the competence of the court to adjudicate on the case. Specifically, the grounds of objection was that the charge did not disclose any prima facie offence against the accused persons; that the prosecution did not seek and obtain the sanction of the then finance minister before preferring the charges against the accused persons, and that the court lacked the jurisdiction to hear the the charge since the offences allegedly committed by the accused persons were committed in Lagos.

It would be recalled that the police had slammed a 7-Count charge on Ogunleye and five others at an Abuja High Court over alleged conspiracy, stealing and conversion of funds, including illegal 60 per cent waiver of the accrued interest on a loan totaling #500million, and receiving a sum of #1,058,658,065.60, being payment of loan on Karu International Market from Nasarawa state government, an amount which is part of depositors’ fund at the defunct Fortune Bank Plc.

Culled From SunNewsOnline.com

Multi-million Fraud: French MD of ANAMMCO to face the law –BPE DG

NairaBrain — Tue, 17 Nov 2009 14:57:25 +0000

Economic and Financial Crimes Commission (EFCC) and other relevant agencies are probing allegations of corrupt practices levelled against Mr. Jacques Gelin, the expatriate managing director of the Enugu-based auto company, ANAMMCO, by the staff of the company.

Director-General of the Bureau of Public Enterprises (BPE), Dr. Christopher Anyanwu, stated this on Monday when senior staff of ANAMMCO numbering over 200 stormed the bureau’s headquarters in Abuja, demanding the removal and prosecution of Gelin for sundry abuses.

They claimed that Mr. Gelin’s activities was gradually crippling ANAMMCO operations, which they said had been programmed to close shop next January 1.
The aggrieved workers had arrived the BPE premises with assorted placards and a mock coffin, in which they conspicuously wrote the name of the black-listed managing director.

Anyanwu told the workers after receiving and listening to their presentations that government had been inundated with allegations bothering on fraudulent activities of Gelin, who he said was currently being investigated by the anti-graft agencies.
He said: “This is not the first time we are hearing about the alleged fraud against Mr. Gelin. The anti-fraud unit of the Nigeria Police Force is probing him, but he was granted bail based on the intervention of the French Embassy. We have also attended series of meetings in Germany where the issues were raised.

“I must tell you that we are impressed by the way you decided to go about this protest peacefully. We are also happy that you have documentary evidence of the allegations you have made. He will face the music. I don’t think I can be bribed. Justice must be done in this matter though it seem it is taking a little longer time, but the course of justice could appear to be slow but surely will grind to its end.

“I must tell you that we are not trying to pass judgement from our side. That is what the law says, but we will take the appropriate steps on the petitions you had written. He must be made to defend himself of all these allegations, which to my mind are weighty enough. We can assure you that the company will not die. Be rest assured that undiluted justice will be done,” Dr. Anyanwu stressed.

Earlier, the ANAMMCO workers had barricaded the entrance gate of the BPE with mock coffin and assorted placards, some of which read: ‘Lawmakers, where are you? Gelin –Father of all fraud; as far as Nigeria is concerned, I can bribe my way, says Gelin; Nigeria Police Can Not Arrest Me, Says Gelin; We Need German MD, Gelin Must Be Probed’, among others.

Making their grievances known to the BPE management, Chairman of the Senior Staff Association of the ANAMMCO workers, Mr. Frank Nwagbara and Secretary, Mr. Mike Agu, urged the bureau to immediately probe the illegal fleecing of funds from ANAMMCO to a private company incorporated with ANAMMCO funds through which most of the fraudulent practices were perpetrated.
The workers, who provided detailed instances of large scale fraud involving huge sums of money against Mr. Gelin and few of the top management of ANAMMCO, alleged that between 2007 and now, the company had lost over N2 billion.
Providing breakdown of the alleged fraud, the workers claimed that Gelin illegally approved payment of N1.5 billion overdraft to some leading banks (names withheld) in the country for services not rendered to ANAMMCO.

They also claimed that the managing director, along with a retired company secretary, who was later recalled to serve in the same position under spurious contract arrangement, also approved that N45.7 million be withdrawn for settlement of some unnamed staff of the Federal Inland Revenue Services (FIRS).
Similarly, the workers alleged that of the 120 per cent bonus approved for them for their superlative performance last year, Gelin and his collaborators withheld 20 per cent of the money running into several millions of naira, which they claimed was for the settlement of some tax officials.
After concluding from the BPE, the workers said they would storm EFCC, ICPC, Force Headquarters, National Assembly and the Ministry of Commerce and Industry to ventilate their position.

First City Monument Bank Staff Nabbed Over N12.5m Fraud

NairaBrain — Tue, 17 Nov 2009 13:11:05 +0000

An official of First City Monument Bank, Mr. Olajide Ogundipe has been arrested by the Economic and Financial Crimes Commission, EFCC, for defrauding the bank to the tune of N12.5 million, out of which the anti-graft agency has been able to recover N9 million from the suspect.

The bank had on September 4, 2009, petitioned the EFCC, alleging fraudulent withdrawal of money from the bank’s ATM in excess of N12million by a staff of the Lokoja branch, Mr. Ogundipe.

The bank had observed that some unexplainable entries were passed between one of its assets accounts and its ATM at its Lokoja branch.

In the course of investigation, EFCC operatives discovered that sometimes in March, 2009, Olajide who works at the Lokoja branch of the bank, posted a debit entry of N450, 000.00 to the assets account and credited the ATM with same value, which was subsequently taken out in bulk cash from the ATM machine after close of business.

Further investigation revealed that several other similar entries in excess of N12 million have been posted and subsequently withdrawn in the same manner.

Olajide who confessed to the crime after his arrest said he spent the money to sponsor his wedding in 2008. He said he made the withdrawals, usually a minimum of N500, 000.00 each time he loads the three ATM machines in Lokoja. “Thereafter, I will manipulate the posting to balance the account”, he confessed.

The Osun state born banker who said he joined FCMB in September 2008 after three years with a new generation bank in Abuja said he never kept the stolen money in the bank but in his brief case at his Lokoja home and unknown to his wife who is resident in Karu, Abuja.

After the confessional statement, Olajide who promised to return the stolen money made good his promise when his lawyer, Barrister Ibrahim Muktari, brought to EFCC an FCMB draft of N9,000,000 dated 22 October, 2009. He had earlier paid N3, 500,000.00 of the stolen money.

The suspect is expected to be arraigned in court soon.